Wonga will soon be offering short term loans more conveniently and flexibly than other online lenders. They won’t be cheap loans - interest will be charged at 1% a day - but you will only borrow cash for between five and thirty days. And that’s a crucial point. It’s a short term loan you pay back on a date that suits.

Not only that but, unlike most short term loans, you’ll also be able to choose exactly how much you want to borrow, down to the last pound. As you make that decision, we’ll tell you how much the loan will cost you before you apply. For example, borrow £100 for ten days and it’ll cost you a tenner - £1 per £100 borrowed per day.

Sound fair? We think transparency and flexibility are vital and people are then bright enough to check out the cost of the loan and make a decision whether to go for it or not. What we’re not so sure about is the fact we’ll still have to publish the official ‘APR‘ on the site. It’s currently law for all loans in the UK, but is a theoretical calculation of how much a five or thirty-day loan would cost if taken for a year really helpful to consumers? We think this excellent cartoon from a leading US short-term lender makes a great point!

This entry was posted on Monday, May 12th, 2008 at 12:04 pm and is filed under Credit, General, Loans, Responsible borrowing, Wonga.